There's a Financial Crisis in Detroit? No, Really? We Didn't Notice.
Well, here we go, people.
From The Washington Post/AP:
DETROIT — Michigan’s governor said Friday that unless Detroit’s fortunes suddenly and miraculously improve, he will appoint an emergency manager to take control of the city that was once one of the nation’s most prosperous manufacturing centers.
If the governor follows through with his plan, Detroit would become the largest city in the United States to have its finances placed under state control.
Detroit has a $327 million budget deficit and faces more than $14 billion in long-term debt. It has been making ends meet on a month-to-month basis with the help of bond money held in a state escrow account. The city has also instituted mandatory unpaid days off for many city workers.
Emergency managers have the power under state law to develop financial plans, renegotiate labor contracts, revise and approve budgets to help control spending, sell off some city assets and suspend the salaries of elected officials.
Eventually, Detroit will be the first major American city to be handed over to state control. It will be the sixth city in the state of Michigan itself.
The problems that have existed in Detroit since the 90s--crime, poverty, and corruption--have been exacerbated by the economic downturn. What will follow are layoffs, furloughs, shortages in labor, and suspension of overall growth and development. And yes, the worsening of an already failing state.
In essence, it is helpful to think of Detroit as the microcosm of America.